Having slightly revamped my asset allocation, I decided that I would list the securities that I use to fill that asset allocation.
Equities (60%) made up of:
Canadian Equity (25%)
- Barclays iUnits S&P/TSX 60 Index Fund XIU (MER 0.17%)
- Altamira Precision Canadian Index fund (MER 0.54%)
- TD e-Funds Canadian Index (MER 0.31%)
- 14 Canadian DRiPs
I add to my Altamira Canadian Index fund regularly. Once it gets large enough to offset my brokerage cost, I roll that money into my iUnits ETF to take advantage of the super low MER. If I need to rebalance, I move money in and out of the mutual fund. I never touch the iUnits. This is my basic strategy of using the ETFs and mutual fund combo.
All my e-Funds are in a taxable account. My DRiPs are also in a taxable account letting me take advantage of the dividend tax credit. These are long term holds.
US Equity (18%)
- iUnits S&P 500 C$ Index Fund XSP (MER 0.30%)
- Altamira US RRSP Index (MER 0.53)
- RBC O’Shaunnessy US Value Fund (MER 1.61%)
- CIBC US Small Companies (MER 2.62%)
- TD e-Funds US Index (MER 0.33%)
Same idea as Canadian Equity. I build up funds within the Altamira index and then roll it over to iUnits once it is large enough.
I also decided to try the O’Shaunnessy line of funds. I had heard good things and it has a fairly low MER compared to other funds (although much higher than index funds). I also wanted some exposure to small caps. I went with the CIBC fund but I am going to investigate replacing it with a lower MER fund in the near future.
International Equity (15%)
- Altamira International RSP Index (MER 0.54%)
- TD e-FUnds International Index (MER 0.48%)
The MER on the equivalent iUnits fund XIN is 0.50%. For the moment, I have invested solely in the Altamira index.
Emerging Markets (2%)
- CIBC Emerging Markets Index (MER 1.23%)
Although the MER is high for an index fund, this was the only one that I could find. Some of the actively managed emerging markets funds were over 3%!
Non-Equity portion of my portfolio:
Real Estate (5%)
- iUnits S&P/TSX Capped REIT Index Fund XRE (MER 0.55%)
- RioCan REIT DRiP
Not to much to say here. I need a fund to place temporary money into as I build towards the ETF. CIBC Real Estate Fund has a MER of 2.84%. Trying to find a better spot.
Cash (5%)
- At the moment, in a money market fund. But these are terrible. Considering the Altamira T-Bill fund (MER 0.42%). I want this cash to be readily available so that I can buy on the dips.
Fixed Income (30%)
- Currently, a mixture of GICs.
This is the one that I am still working on. I am deciding whether to buy the
iUnits Canadian Bond Broad Market Index Fund XBB (MER 0.30%) or try to create my own bond ladder. I am new to bonds, so I am seeing if this is even possible. Probably, I don’t have the purchasing power to get good rates on bonds. So, if that fails, I will then look at a combination of the iUnits ETF and GICs.
Well, that’s it. Comments are welcome. It is a pretty plain vanilla looking portfolio.
6 users commented in " Filling My Asset Allocation "
Follow-up comment rss or Leave a TrackbackCouple things:
1. Have you maxed out your RRSPs?
2. Have you considered getting rid of GICs altogether?
3. Do you mind sharing what DRIPs you have? I’m more interested in knowing what sectors they are in and their market caps?
Let’s see.
1. Up until this year, I have maxxed out my RRSP room (which is why I was starting to invest outside by RRSP by purchasing DRIPs and e-Funds). However, I am a federal government employee, which means that my pension plan takes away most of my RRSP room. It also means that when I start to withdraw from my RRSP, it will be taxed quite high.
2. I have thought of getting rid of my GICs. Like I said, I am still tweaking my fixed income portion. I plan to purchase iUnits XBB to replace the GICs that just recently came due.
3. I own most of the Canadian DRIPs that are available (unfortunately, there really aren’t that many). So I have like 3 banks, a couple of telcos, a couple of utilities, a REIT, an oil trust, couple of gas companies, etc… My DRIPs are still a small portion of my portfolio as a whole. Of all my DRIPs, my oil trust really took off (62% return in 1 year). So it has become the biggest part of my DRIP portfolio.
Hi, I am new in Canada. Love your website! What online brokerage do you use? Any recommendation?
Thanks.
All the big bank brokerages are very competitive (with each other!). Not much to distinguish them from each other.
If I had to suggest one, it would probably be TD Waterhouse as that will allow you to purchase TD e-Funds (lowest cost mutual fund index funds available in Canada). You cannot purchase e-Funds from any other discount broker. What I don’t like about TD is that some of the mutual funds have sale charges. I hate that.
I believe that ScotiaMcLeod allows you to buy, sell and switch all the funds that they sell free of charge. But, you can’t buy e-Funds from them. The next lowest cost alternative to TD e-Funds would be the Altamira Precision index funds.
I am also interested in DRIP. But don’t know where to get first share. Can you let me know howto get it and what is average cost for them?
Thanks a lot.
Newbie
Sorry, my email is not complete for previous post.
Leave A Reply